Message-ID: <7137067.1075844201956.JavaMail.evans@thyme> Date: Mon, 30 Apr 2001 03:47:00 -0700 (PDT) From: lisa.jacobson@enron.com To: michael.terraso@enron.com, jeffrey.keeler@enron.com Subject: Voluntary Approaches to Climate Change - Action in Congress & the Administration Cc: steven.kean@enron.com, linda.robertson@enron.com, richard.shapiro@enron.com, catherine.mckalip-thompson@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable Bcc: steven.kean@enron.com, linda.robertson@enron.com, richard.shapiro@enron.com, catherine.mckalip-thompson@enron.com X-From: Lisa Jacobson X-To: Michael Terraso, Jeffrey Keeler X-cc: Steven J Kean, Linda Robertson, Richard Shapiro, Catherine McKalip-Thompson X-bcc: X-Folder: \Richard_Shapiro_June2001\Notes Folders\All documents X-Origin: SHAPIRO-R X-FileName: rshapiro.nsf To: Mike Terraso Jeff Keeler Cc: Steve Kean Linda Robertson Rick Shapiro Catherine McKalip-Thompson From: Lisa Jacobson Re: Voluntary Approaches to Climate Change - Action in Congress & the=20 Administration Date: April 30, 2001 In the current debate over how the U.S. should approach domestic and=20 international climate change issues, focus has increased lately on explorin= g=20 =01&voluntary=018 approaches to reduce greenhouse gases. President Bush=01= ,s=20 statements that the U.S. would not impose mandatory CO2 reductions on power= =20 plants as part of a multipollutant bill and his position that the U.S. shou= ld=20 not move forward with work on the Kyoto Protocol (which contains actual=20 commitments on emission reductions) have driven the discussion about=20 voluntary programs and whether such programs can achieve significant result= s. Two articles (attached) appeared in the Washington Post over the weekend. = =20 The first, reported on an interview with Senate Minority Leader Tom Daschle= =20 (D-S.D.) where he said that he and other Democrats would be open to new=20 approaches to address climate change, including voluntary compliance with= =20 greenhouse gas emission reduction goals. In response to strong criticism b= y=20 environmentalists, a second article appeared on Sunday that backs away from= =20 those remarks and re-states his support for =01&binding measures=018 to red= uce=20 greenhouse gas emissions. =20 Both the Bush Administration and leaders on Capitol Hill are seeking Enron= =01,s=20 input on the structure and potential effectiveness of voluntary programs. = =20 As the Administration=01,s Climate Change Task Force is preparing its=20 recommendations for a new U.S. proposal, our input is needed in the next fe= w=20 weeks. Experience with Voluntary Approaches - Back to the Future? The U.S. and other developed nations have acknowledged that significantly= =20 reducing greenhouse gas emissions will be extremely difficult through=20 voluntary measures alone. It is not yet known whether the Bush=20 Administration will propose a climate change plan that will result in lower= =20 atmospheric concentrations of greenhouse gases. However, it is unlikely th= at=20 a U.S. proposal that calls for only voluntary measures will carry any=20 credibility in the international debate. =20 Clearly, industry opponents to carbon regulation do not seek a strong=20 program, but as recent weeks suggest, Administration officials have differi= ng=20 views on objectives and approaches. Below are some recent examples of wh= y=20 voluntary plans in the past have not provided the desired results: 1) Under the Framework Convention on Climate Change, signed by former=20 President Bush and subsequently ratified by the U.S. Senate, developed=20 countries voluntarily agreed to return their greenhouse gas emissions to 19= 90=20 levels by the year 2000. By 1995, industrialized countries acknowledged th= at=20 they were not on track to meet the voluntary goal, and initiated negotiatio= ns=20 to adopt binding and quantifiable emissions reduction commitments. These= =20 negotiations resulted in the Kyoto Protocol=01,s targets and timetables, wh= ere=20 industrialized nations committed to reduce their aggregate emissions to abo= ut=20 5 percent below 1990 levels between 2008 and 2012 and the U.S. agreed to a= =20 reduction of 7 percent below 1990 levels between 2008 and 2012.=20 2) On the domestic level, the 1992 Energy Policy Act directed DOE to develo= p=20 a voluntary reporting program to collect information on activities to reduc= e=20 greenhouse gas emissions. The aim of the =01&1605b=018 program is to encou= rage=20 voluntary emissions reductions. While some companies participate in the=20 program, it has not yielded significant emissions reductions. Companies=20 participate mostly to receive positive pubic relations benefits and to gain= =20 experience with inventories, reporting and verification. Many hope to be= =20 rewarded with credits for their voluntary action under a potential mandator= y=20 program. To encourage participation, 1605b provides wide flexibility on=20 setting a baseline. It also allows for dual reporting of emissions=20 reductions, self-certification of reductions and permits the entity to deci= de=20 the level of reporting it undertakes. A 1998 GAO study said that EIA and other organizations agreed that many of= =20 the reductions reported under the voluntary reporting program would not=20 qualify as =01&real, appropriately reviewed and verified=018 emissions redu= ctions. =20 Congress has been considering how to strengthen the 1605b program for sever= al=20 years and will likely include provisions to do so in new climate change pla= ns. 3) Chafee/Lieberman =01&Credit for Early Action=018 legislation: In the 10= 6th=20 Congress, the debate centered around proposals to help U.S. businesses=20 achieve =01&credit=018 for voluntary actions to reduce greenhouse gases. T= he=20 legislation never progressed, however, due to the difficulty in structuring= a=20 voluntary program. Concerns about granting credit against not-yet-created= =20 regulatory regimes, difficulty with setting baselines for determining which= =20 voluntary actions warrant credit, and political problems with links to=20 international commitments all added to the bill=01,s demise.=20 Opportunities for Enron Through our ongoing advocacy on domestic multipollutant strategies and our= =20 role as a respected source for information on how to structure market-based= =20 systems for emissions reductions, Enron is well situated to provide=20 high-level input to the Administration and Congress toward developing=20 credible energy and climate change proposals. In particular, we have a rea= l=20 opportunity to promote ideas that benefit Enron businesses - new generation= ,=20 gas, energy efficiency, emissions trading and risk management - while handi= ng=20 the White House some ways to restore its credibility on climate issues. Enron=01,s input should continue to focus on mechanisms that will result in= real=20 reductions of greenhouse gas emissions, while providing full flexibility fo= r=20 companies and others to meet clear goals. We have already indicated to the= =20 Administration and others in initial discussions that voluntary measures=20 could fit into a comprehensive package, but will likely fall short of=20 environmental and international expectations. =20 The Senate will be conducting several hearings in the coming weeks, and the= =20 White House=01,s Task Force will continue to meet and prepare its climate c= hange=20 proposal. Jeff and I will develop specific recommendations for the White= =20 House and Congress and circulate them with you and relevant Enron commercia= l=20 groups. We will also incorporate discussion of these issues in an Enron-wi= de=20 strategy meeting on emissions issues we are planning in May. Please do not hesitate to contact me if you have any questions. Lisa Jacobson Enron Manager, Environmental Strategies 1775 Eye Street, NW Suite 800 Washington, DC 20006 Phone: +(202) 466-9176 Fax: +(202) 331-4717